The Study On Expected Loss Model Application Of Housing Loans To Banks In China

In 2008, the global financial crisis triggered by the U.S. subprime mortgage crisis has brought the Incurred Loss Model into criticism. The Incurred Loss Model conform loss too late that leads to the profits and losses of the body appear "cliff effect" and "pro-cyclical effect", which increase volatility of financial markets. Among the projects of The International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB), and put forward the expected loss model to replace the existing model.The implementation of the Expected Loss Model has become the inevitable trend. IASB and FASB jointly improved the Expected Loss Model, sequentially proposed the expected cash flow, two group approach and three-bucket model. This paper introduces in detail the principle and calculation of various periods of different impairment model principle, and to evaluate different impairment model. The core content of this paper is introduced the FASB and IASB are put forward in the latest draft of the latest impairment model -- "Current Expectations Credit Loss Model" and "Expected Credit Loss Model". The home loans how to apply two kinds of impairment provision for impairment of the model in the paper. And I compare the measurement results of Incurred Loss Model and Expected Loss Model, which proves the rationality and feasibility of Expected Loss Model.In our country, the development of the real estate market is unstable. The real estate market contains much risk. So banks should improve the housing loan risk alert. Because our country accounting standards with the international convergence of accounting standards, Expected Credit Loss Model implementation has become an inevitable trend in our country. In our country banks, financial assets occupy a big proportion. So the implementation of the credit loss model is expected to have a great impact on the banking sector in China. The paper elaborates the effect if our country banks apply the Expected Credit Loss Model and the challenge of the application. To execute expect credit loss model face the challenges and difficulties, from the aspects of standards in our country, the external environment and the bank internal three point of view put forward reasonable suggestions for improvement.